The Motorcycle

What a great investment I made. Back in July I decided I ought to be in the market for a motorcycle but only after running some numbers. Allow me to share.

First I broke down the costs to a cost-per-mile (CPM) figure. Here is what I came up with:

Car CPM: $0.24
Motorbike CPM: $0.1218

So the costs of using the motorbike are almost exactly half of the costs of the car. Here’s how I came to the CPM figures:

I broke down the CPM into three parts: Fuel CPM, Maintenance CPM and Replacement CPM. Fuel was easy enough to figure out. Just take your expected miles-per-gallon and divide it into the expected cost of gas. I created a spreadsheet so that I could dynamically change the MPG of the bike I was expecting to buy along with the expected costs of gasoline.

The maintenance was easy enough to estimate since I could figure in regular maintenance such as broken light-bulb, oil changes, filter changes, tires and adjustments easily just from looking at scheduled maintenance charts and using my own experience as a gauge. It’s the big repairs that are harder to anticipate. There’s no telling when an odd gasket may spring a leak or the chain may break. But I had to go with my best guesses there.

The third aspect of the CPM figure was replacement costs. I simply took the number of miles I expected to get out of the bike and divided it into the purchase price of the bike. With the purchase price I included things like helmets and other necessary motorcycling equipment.

Here’s what the break down looks like:
CPM Car Motorcycle
Fuel 0.10 0.04
Maint. 0.10 0.065
Replc. 0.04 0.02
Total 0.24 0.12

Given those figures, the accuracy of which I’m fairly confident about, we can go on to calculate what the ROI of a motorcycle would be.

To do that I had to estimate how many miles I would be driving on the motorcycle in lieu of the car. I put that figure at 5,000 annually.

To drive that many miles in the car would cost, $1,208.93, in the bike it’s only $609.38. A savings of $599.55. From that I had to subtract the annual cost of insurance, registration and inspection and the total annual savings after that came to $330.55. Not huge, but not bad.

Given that I bought a small used bike for only $1,700 including the helmet and gloves it will only take 5.14 years for the motorcycle to pay for itself through lower costs per mile. Which results in an annual ROI of 19.44%. That’s a pretty great return. Not to mention the fact that I get a fun motorcycle out of the deal to drive around that makes me way cooler than I would otherwise be.

The reality.

It’s now October so motorbiking season is just about wrapped up. I drove about 3,000 miles since I bought the bike in July. I’m shy of my 5,000 mile goal but keep in mind I wasn’t even riding the bike until half-way through the summer. Next year with the spring time and the entire summer I imagine there’s a good chance I’ll surpass my required 5,000 miles which will actually make the bike an even better investment. Beats the S&P 500.

I recall reading an article years ago as I was about to buy a motorcycle by someone who was advising people not to get a bike in order to save money because he didn’t think you could. He, of course, was an idiot. If you buy a $20,000 Harley and decide you want to put chrome on everything, get a $1,500 leather getup and then only drive the thing on the occasional sunny Sunday afternoon then of course you’re going to be losing a hell of a lot of money. But there are other ways to be a motorcylist. My bike, used from ebay, was only $1,600. It’s a 250cc that gets 80mpg and the parts for it are so cheap it’s a joke. It’s just as fun and I’m saving a bundle besides.

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